In 1970 President R. Nixon "temporarily" suspended the U.S. Gold Standard. In order to control inflation should we consider that system now?

President Nixon was embroiled in the Watergate scandal that stole the media headlines... so most Americans did not notice the abandonment of the Gold Standard. Since the standard was suspended, as now, inflation has risen each year.
Obviously, the rise of inflation is like a "tax" that siphons buying power from our citizens on a daily basis. Congress' spending was curtailed by the Gold Standard. Spending needs to be controlled today. Your thoughts?

Apr 22 2013:
Bob, I don't think it is that simple. The Britton Woods Act included 44 nations that all agreed on a set price of gold and they would all use the US Dollar as the standard. The chance of that occuring again is almost nil.

One idea that was discussed a week or so ago was the use of the Bit Coin.

I do think your conversation is necessary and that a new basis for international standards is required. Had the Euro caught on it may have become the new and accepted medium.

As the stability of Europe is still questionable I fear that the US is on the path for both a recession and a depression and perhaps at the same time ... the value of the US dollar is in deep jeaporady and more countries are on the verge of fiscial instability.

After the falls are complete perhaps the major nations will once again approach the market and acceptable standards. In my opinion the United States has demonstrated what is not a viable method ... the fed ... keynesian economics ... and deficit spending ... etc ...

I hope that someone who understands this enters and gives us all good counsel.

Apr 22 2013:
Imagine a Monopoly game. What will be the result if, in the middle of the game, we give each player another complete set of the various colorful denominations of currency? The number and availability of properties remains constant but the supply of money has increased. There are only two possibilities: Either people will just keep the fiat money and not spend it (highly unlikely), or they will use the "new" money to outbid others in the frenzy to accumulate wealth. Prices escalate to assimilate the new money supply. What cost $220 before now costs $400! Buying power of the dollar has diminished while goods and services have remained constant. Welcome to Inflation Monopoly! Only the Banker wins.

Apr 21 2013:
Stop deficit spending by returning to the gold standard ASAP! Absotutely! We forward thinking folks of Arizona now have gold and silver as legal tender. It is a step in the right direction toward fiscal sanity. While we are cleaning-up our act, let's dissolve the Federal Reserve Bank system if for no other reason than that it is NOT Federal, it is NOT a Reserve, and it is NOT a Bank. It only exists to bring the US under socialist control. Restoring the gold standard would fix all that!

Comment deleted

Apr 22 2013:
If the supply of gold compared to the supply of goods and services is so small that a one-ounce coin is too valuable for typical transactions, we would simply use half-ounce, or one-tenth ounce coins. The amount of gold available does not affect its ability to serve as money, it merely affects the QUANTITY of gold that would be used to measure a transaction. In a free market on the gold standard the simple adjustment of the purchasing power, or effectiveness of the gold-unit will regulate the economy. Printing more fiat money while keeping good and services constant merely causes prices to escalate and buying power to diminish, aka inflation. It would not be so with gold. (This is a paraphrase of E. Griffin's book, The Monster From Jekyll Island, pp 141, 142.

Apr 25 2013:
my opinion is: we don't want the gold standard. we want free market money. let people decide what kind of money they want to use. there might be many good solutions, and different people in different situation might prefer one or another. if someone wants gold, he can use gold. if someone wants to use bitcoin, he can use bitcoin. if someone wants to use government issued dollars, he can use dollars. if someone wants to use chinese yuans, he can do just that.

in order to achieve that, all laws taxing, prohibiting or controlling the use of alternate money forms should be repealed. there should be no tax on exchange rate gains. there should be no limit or any red tape associated with alternate moneys. there should be no legal tender laws.

Apr 26 2013:
inflation is easy: if people suspect inflation in the future, they might simply opt for another money that does not inflate. there are debates about the causes of inflation. but simple logic tells that there can be no long term inflation if you use a money that has a fixed stock, like gold.

congressional spending is a more complex issue. again, opinions differ, so hereafter i'm presenting the school of thought which i'm subscribing to. governments use 3 main sources to cover their expenditures. tax, inflation and debt. tax is straightforward, and not our concern now. the other two is interconnected. debt is expensive, and quickly spirals out of hand if interest rates are considerable. for that reason, governments (via central banks) create new money, and buy their own bonds. in effect, they push interest rates down. this eventually causes price inflation, as the money supply increases, according to the law of supply and demand (more money, less value). but at the same time money creation also directly supports government spending, since a great part of government bonds are not really represent debt, but just imaginary debt bought using new money. this new money ends up in the treasury, and the government can spend it. so in brief, new money ends up in the government's hands, plus it pushes down interest rates on bonds, making them more affordable for the government, so they can issue more.

this entire process is based on money creation. if people don't trust the government money, they will simply not accept it, and the above described shenanigans come to a grinding halt, and the budget has to be balanced. if people are okay with that scheme, and trust it with their own savings, everything is hunky dory, and the government can go on.

Apr 25 2013:
Some History about money and governments...
The US from about 1870 until 1913, suffered little, and was on the gold standard. Controlled by a Gang of nations that agreed to agree.
They kept money, government, and trade stable.
Not a bad time to be alive in America.

Then came WW1 and the greed.
In the year 1913, the FBI, replaced the evil-outlawed Pinkerton's to become the enforcer/protector of bank interests.
In the year 1913, the IRS, was given teeth as tax collector.
Coincidence?

A few more years passed, the economy was on a roller-coaster, and after 3 tries, congress selected a Central Bank that we all know today as the FED.
The FED's job was to keep our economy fit as a fiddle with jobs galore.

Limited Liability Laws were created by congress to protect the Wealthy.
and, to keep them out of jail when they stole too much.

Regulators were "Good ole Boy's", appointed from the most successful in their individual fields. The SEC was created to regulate "the little guys".
===
So, Now I can get around to my point.
The Government has control and/or possession of the Gold and it's supply.
The Government has control of the Printing and Supply of the fiat money.

We can talk all day about changing things.
Opines can be expressed.
Nothing will happen.

Apr 24 2013:
Currency (the IOU paper that governments print) floats and is best for the global economy. Currency is a commodity that can fluctuate widely depending on supply and demand. Gold has a limited supply with some countries having far too much, this severely limits or exaggerates the global economic value of gold.

All currencies float with the good a/o bad decisions of product producers and consumers. The USA, EU, RU, JP, CN currency value force nations to be aware of their global relationships, impact, and risk. The UK was smart in promoting the Commonwealth and divestiture of the empire. The US was dumb in some global adventures (Vietnam and Iraq). We are paying for our mistakes in IOU paper which globally makes US poor for international exchange, but domestically creates great deals and good values. There are many other good reasons for sticking with currency as the method of payment. We can rebuild, reeducate, and retool with U$ currency and U$ labor and products. This works the same for all nations, the gold standard is dead by global and U$ necessity.

National a/o Global inflation and deficits are not dependent in any way on a gold standard.

Apr 22 2013:
I have heard that uncle ben wants a world wide fiat currency.

I suppose they would offer you fiddy cents on the dollar for your American?

It is interesting to contemplate a world wide currency that is not manipulated by the likes of the FED or any other central bank. It would be a huge victory for freedom. And automatically handle the problem of currency fixing. Which would put an end to the shenanigans of people like Soros or China gaining an unfair advantage.

Apr 22 2013:
I don't a lot about this but would like to hear from people who do.

There is a correlation between going off the gold standard and the hockey stick graph of debt. Back then the value was of the dollar was set at $37.00 and you could not legally own gold until 1975. The price of gold did not follow the market because of the Bretton Woods agreement.

There are some dynamics to this that we are not privy to and it is very much manipulated as witnessed last week.

The time might be right for people to move into something that is not manipulated as with Bit Coin?